I'm assuming this doesn't mean anything for T600 users, but am hoping somebody will tell me I'm wrong because of the integrated Wi-Fi.


SAN JOSE (AP)--PalmSource Inc. (PSRC) has finally answered the smart-phone call.

The maker of Palm operating systems for handheld computers plans to introduce Tuesday its first version designed specifically for so-called smart phones.

In addition to incorporating telephony features, the software includes a native e-mail application and Web browser and integrates Wi-Fi and Bluetooth wireless networking connectivity.

It's a move analysts say the Sunnyvale, Calif., company had to make as smart phones gain in popularity, outpacing the declining sales of basic personal digital assistants, or PDAs.

Worldwide shipments of smart phones are expected to almost double from 17.6 million in 2004 to about 30 million next year, according to IDC market research firm.



"This is the basic feature set they have to have," said Van Baker, analyst with the Gartner G2 research firm. "At least now, they'll be invited to the table and it's enough to get them into the game."

Smart phones combine computing and communication functions. Users, say of the Treo 600, which is powered by the Palm OS, can use the devices to make cell phone calls as well as Web surf and do e-mail.

In the past, Treo maker palmOne Inc. (PLMO) and the handful of other PalmSource licensees who have used the Palm OS in smart phones had to incorporate the cell phone and wireless capabilities on their own.

Now, with those functions built into PalmSource's newest version of the Palm OS, dubbed Cobalt 6.1, the company is at least on par with its chief competitors, Symbian and Microsoft Corp. (MSFT), in offering a more ready-to-go engine for cell phone makers, Baker said.

Symbian, which is owned by Nokia and several other cell phone makers, dominates with an estimated 70% share of the worldwide smart phone market.

PalmSource "missed the first generation of smart phones," but the company has now fixed its eyes on the market, Dave Nagel, PalmSource's president and chief executive, acknowledged in an interview.

PalmSource is banking on its new operating system to attract dozens of second- tier, lesser known cell phone makers worldwide that normally lack the resources to develop such sophisticated features on their own.

"We've built the foundation," said Michael Mace, PalmSource's chief competitive officer, and now the company is working on adding software applications that would make smart phones as simple and easy to use as Palm- powered organizers.

"Right now, smart phones are designed for Dilbert," Mace said, referring to the techno-geek Scott Adams cartoon character. "But we want to design smart phones for normal people, and we don't think anybody is doing that right now."

PalmSource stock closed at $20.06 Monday on the Nasdaq, down 53 cents, or 2.6% .


Dow Jones Newswires
09-27-04 1732ET